COMMUNITY RESILIENCE TO CLIMATE CHANGE AND DISASTER RISK IN SOLOMON ISLANDS PROJECT [PHRD] TF012391 FINANCIAL STATEMENTS For the Year Ended 31st December 2018 Table of Contents Page (s) Report of the Executing Agency 2 Auditors Report 3 Balance Sheet 4 Statement of Income and Expenditure 5 Notes to and forming parts of the Financial Statements 6-9 MINISTRY OF ENVIRONMENT, CLIMATE CHANGE, DISASTER MANAGEMENT & METEOROLOGY PO BOX 21, HONIARA, SOLOMON ISLANDS TELEPHONE: +677 23031, FAX: +677 28054 POLICY AND HUMAN RESOURCES DEVELOPMENT (PHRD) TRUST FUND TF012391 F INANCIAL STATE MENTS For the Year Ended 31st December 2018 REPORT OF THE EXECUTING AGENCY Under the terms of my contract, Ihave the mandate from the World Bank and Ministry of Environment, Climate Change, Disaster Management and Meteorology (MECDM), as the Executing Agency, to supervise and manage the funds provided by Japan Policy and Human Resources Development (PHRD) Trust Fund. The Grant (TF012391) is used to pilot resilience activities in Temotu and Guadalcanal Provinces under the Community Resilience to Climate Change and Disaster Risk in Solomon Islands Project (CRISP). I certify that the attached Balance Sheet and Statement of Income and Expenditure which has been I certify that the attached Balance Sheet and Statement of Income and Expenditure which has been prepared under my supervision presents a true and fair view of Affairs of MECDM - PHRD for the year ended 31" December 2018. ated atHonaara this day of Ein2019. Dr. Melchior Mataki Permanent Secretary Executing A:gency Representative Ministry of Environment, Climate Change, Disaster Management & Meteorology Morris Sojnocki CHARTERED ACCOUNTANTS Independent Auditor's Report Lorrs & Sonock 51124V2 Report on the Financial Statements of the Ministry of Environment, Climate P I Change, Disaster Management and Meteorology (IECDM) - Japan Policy 0 s and Human Resources Development (PHRD) 'i 1 We have audited the accompanying financial statements of the Ministry of lnv ironment. Climate ('barge Disaster Management and Meteorolog (MEICDIM) Japan Policy and Human Resources Development (PHRD) which comprise the balance sheet as at 3 1 December 2018 and the statement of income and expenditures for the year then ended and a summars of significant accounting policies and other explanator\ notes as set out on pages 4 to 9. Responsibility for the Financial Statements The Ministry of Environment. Climate Change. Disaster Management and Meteorology as the Executing AgencN. and management of MLCDM - PIIRD Projcet Management arc responsible for the preparation and lair presentation of these 11nancial statements in accordance with applicable Accounting Standards in Solomon Islands and the Grant Atreement TI 012391 dated 24h September 2012 between Solomon Islands and International Bank for Reconstruction and Deelopment & International Development Association, and lor such internal control as management determines is necessary t enable the preparation of a statement that is free from material misstatement. whether due to fraud or error. Auditor's Responsibilit Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with applicable Auditing Standards in Solomon Islands. Those Standards require that swe compil, with ethical requirements and plan and perfrm the audit to obtain reasonable assurance i\hether the financial statements are free from material misstatement. An audit insolves performing procedures to obtain audit esidence about the amounts and disclosures in the financial statements. the procedures selected depend on the auditor's judgment. including the assessment of the risks of material misstatement of the financial statements. wshether due to fraud or error. In making those risk assessments. the auditor considers internal control relevant to the entity's preparation and lair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not or the purpose of expressing an opinion on the effectis cress of the entit, 's internal control. An audit also includes ealuating the appropriateness of accounting policies used and the reasonableness of accounting estimates made bN manauement. as wkell as esaluating the o%erall presentation of the financial statements. I he audit also involved ealuating the project's compliance wNith the requirements of the Grant Agreement dated 24" September 2012 between Solomon Islands and International Bank for Reconstruction and I)eelopment & International Developmient Association. We do not. in giving this opinion. accept or assume responsibility for any other purpose or to any other person to swhom this report is shosin or in to whose hands it maN come save \where expressly agreed by our prior consent in writing, We belies e that the audit e idence we have obtained is sufficient and appropriate to pro\ ide a basis for our audit opinion. Opinion In our opinion: (ta the financial statements present fairly. in all material respects. the financial position of the MECDl - P IRI) Proiect as at 3l1P December 20118 and the results of its operations for the year then ended. in accordance wsith the accounting policies set out in note I of the financial statements. (b) project funds pros ided by the World Bank. hase. in all material respects. been used in accordance with the conditions o[ the lInancing agreement. and only tbr the purposes for which thex were prosvided and adequate documentation exists to support the expenditure incurred as detailed in the Statement of Income and 1-xpenditures. w%hich can be relied on as a basis foir loan disbursement. 1c) the designated accounts have been used and maintained in accordance with the provisions of the financing agreement and cash at bank balances at 31" December 2018 are correcl stated. (d) apart from the failure to provide audited financial statements to the World Bank not later than 6 months alter the end of the financial sear, sse hase noted no significant internal control seaknesscs or non-compliance swith the financing agreement terms. MORRIS & 1 J()CK1 Chartered Acountants Date: I ]oniara BY (-iRl' J SOJC(Ki PARTN TR 3 COMMUNITY RESILIENCE TO CLIMATE CHANGE & DISASTER RISK IN SOLOMON ISLANDS PROJECT (PHRD) TF012391 Balance Sheet For the year ended 31st December 2018 2018 2017 SBD SBD Notes Assets Current Assets Cash at Bank 3 (i) 2,172,761 Community-led Sub-Projects 4 (1) 563,340 Other Advances 4 (ii) 2,890 Total Current Assets 2,738,991 Net Assets 2,738,991 Accumulated Funds Opening accumulated funds 2,738,991 1,116,855 Current Year Surplus/(Deficit) (2,738,991) 1,622,136 Total Reserves 2,738,991 Finance Officer Project Coordinator The Balance Sheet is to be read in conjunction with the notes to and forming part of the accounts on page 6 to 9. 4 COMIMUNITY RESILlENCE TO CLIMATE CHANGE & DISASTER RISK IN SOLOMON ISLANDS PROJECT (PHRD) TF012391 Statement of Income & Expenditure For the year ended 31st Decmber 2018 2018 2017 SKI) ___SI Notes TFO12391 -TF012391 INCOME World Bank - Grants Received 2 815,540, 3,619 106 TOTAL INCOME 815,540 3,619,106 EXPENSES Advertising & Publicity 117 012 Bank Charges 3,214 4,674 Consulting Services 139.500 - Consumable Materials - Miscellaneous 24,599 - Contract Services - Works 71 880 43070 Freight 38,558 168.228 Fuel 4,240 9,586 Hire 10,750 91.508 Materials - Community Projects 715 533 826,085 Miscellaneous - Community Projects 147 503 169 645 Meals & Refreshments 67 127 Motor Vehicle Expenses - Fuel +Service 1 500 Office Supplies & Stationary 66 107 Printing & Photocopying 445 150 Printing - Training Materials 396 590 Staff Expense - International Consultants 5 39,545 Staff Expense - National Consultants 6 271 516 Travel Expense 7 503 123 61,736 Utilities - Water + Electricity + Other 1,814 - Training Materials 1 609 - Workshops and Seminars 8 38,223 8,120 Miscellaneous expense 9 14 971 3 785 Unacquitted expenses 10 474.012 570,988 TOTAL EXPENDITURE 3,554,531 1,996,970 NET SURPLUS/ (DEFICIT) (2,738,991) 1,622,136 The income & Expenditure Statement is to be read in conjunction with the notes to and forming part of the accounts on page 6 to 9. COMMUNITY RESIIENCE TO CLIMATE CHANGE & DISASTER RISK IN SOLOMON ISLANDS PROJECT (PHRD) TF012391 NOTES TO THE FINANCIAL STATEMENTS for the year ended 31st December 2018 1 ACCOUNTING POLICIES a Basis of preparation The financial statements have been prepared in accordance with generally acceptable Accounting Standards using the Accrual Basis of Accounting. The accounting policies have been applied consistently throughout the period. b Reporting entity The financial statements are for the Community Resilience to CImate Change & Disaster Risk in Solomon Islands (CRISP) project, which s funded by the international Bank for Reconstruction and Development (IBRD) ('the World Bank) in partnership with the Ministry of Environment, Climate Change, Disaster Management and Meteorology. The principal objective of the CRISP project is to: . integrate climate change adaption and disaster risk reduction across the recipient's sectors il. impruve cimate change adaptation and risk reduction information and communication iii. increase the resilience of rural communities to climate change and natural hazards c Reporting currency The financial statements are presented in the Solomon Islands currency, the Solomon Islands dollar (SBD). d Recognition of Revenue Revenue is recognized when cash is received or a withdrawal application is approved for payment by the Bank within the financial year, although payment is received in the subsequent year. e Foreign currency transactions Transactions in foreign currencies are recorded at the exchange rate at the date of the transaction. Non-monetary assets and liabilities denominated in foreign currency are recorded at the exchange rate at the date of the transaction f Fixed Assets Capital Expenditure is expensed during the year in which the expenditure is made. g Unocquitted Expenses - Community Sub-projects Funds are advanced from the Project Management Unit (PMU) designated bank accountto community sub-project bank accounts from which expenditures are paid in respect of the community sub-projects. Expenditures made during the year from the community sub-project accounts for which acquittal reports have not been submitted by the respective sub- project committee to the PMU to enable the expenditure amounts to be allocated to the appropr ate expense category are disclosed as unacquitted expenses in the statement of income and expenditure. h Closure of Account The grant account for the Japan Policy and Human Resources Deveopment (PHRD) trust fund, grant no, TFO12391, officially closed on 27" November 2018. 6 COMMUNITY RESILIENCE TO CLIMATE CHANGE & DISASTER RISK IN SOLOMON ISLANDS PROJECT (PHRD) TF012391 NOTES TO THE FINANCIAL STATEMENTS for the year ended 31st December 2018 2 FUNDING Grant Funding was provided by the International Bank for Reconstruction and Development and tne International Development Association (World Bank), acting as administrator of grants provided by the Japan Policy and Human Resources Development (PHRD) Trust Fund to support Disaster Reduction and Recovery through the Increasing Resilience to Climate Change and Natural Hazards Project. During the year, Advances from World Bank and reimbursements of expenditures was recorded. 2018 2017 (SBD) (SBD) ADVANCES - GRANT INCOME (TF012391) Advance to Designated Account 815,540 3,619,049 Bank Interest - 57 TOTAL 815,540 3,619,106 3 CASH AT BANK i. Project Management Unit Designated Account Cash Balance with ANZ - Acct# 4934447 2,172,161 TOTAL CASH AT BANK 7761 4 ADVANCES i. Community Sub-Project Bank Accounts Horabau SIC Account with BSP - Acct# 4001004508 1,745 Duidui SIC Account with BSP - Acct# 4001004482 1,010 Kobito SIC Account with BSP - Acct# 4001120411 - 16,968 Lulunga SIC Account with BSP - Acct# 4000598427 - 104,382 Mahu SIC Acct with BSP - Acct# 4000599268 - 2',620 Tanavasa SIC Account with BSP - Accto 4001120437 - 95,083 Papagu SIC Account with BSP - Acct# 4001135419 - 23,855 Koliasi SIC Account with 3SP - ACct# 4001135013 - 135,299 Malo SIC Account with BSP - Acct# 4001054362 54,445 Baenga SIC Account with 5SP - Accte 4001052689 5,546 Nela SIC Account with BSP - Acct# 4001053042 217 Luova SIC Account with BSP - Acct# 4001052903 26,476 Venga SIC Account with BSP - Acct# 4001052713 199 Nea SIC Account with BSP - Acct# 4001052911 39,466 Manoputi SIC Account with BSP - Acct# 4001120429 31,029 TOTAL - 563,340 7 COMMUNITY RESIUIENCE TO CLIMATE CHANGE & DISASTER RISK IN SOLOMON ISLANDS PROJECT (PHRD) TF012391 NOTES TO THE FINANCIAL STATEMENTS for the year ended 31st December 2018 2018 2017 SBD SBD 4 ADVANCES -Continue ii Other Advances - PMU - 2,890 TOTAL 2,890 5 STAFF EXPENSES - INTERNATIONAL CONSULTANTS Consultant Fees (Long Term) 39,545 TOTAL 39,545 6 STAFF EXPENSE - NATIONAL CONSULTANTS Salaries 270,661 NPF Contribution (7.5%) 855 Tools TOTAL 271,516 - 7 TRAVEL EXPENSE Travel Expense -Accommodation 74,056 3,900 Travel Expense - Airfare 17,090 Travel Expense - Allowance 85,679 800 Travel Expense - Motor Vehicle/Taxi/Boat Hire 283,835 56,236 Travel Expense - Sundry 37,413 800 TOTAL 503,123 61,736 8 WORKSHOPS AND SEMINARS Catering Workshop & Seminar 38,223 Workshops and Seminars __________________j-8,120 TOTAL 38,223 8,120 8 COMMUNITY RESILIENCE TOCUIMATE CHANGE & DISASTER RISK IN SOLOMON ISLANDS PROJECT (PHRD) TFO012391 NOTES TO THE FINANCIAL STATEMENTS for the year ended 31st December 2018 2018 2017 SBD SBD 9 MISCELLANEOUS EXPENSE Sundry Expenses 14,971 3,785 Total 14,971 3,785 10 UNAQUITTED COMMUNITY SUB-PROJECT FUNDS Horabau SIC 1,616 3,700 Duidui SIC 862 1,900 Koli SIC 27455 Tanavasa RDP Topup 5,545 Kobito SIC 16,644 37,795 Singe 82,385 Pitukoli 184,729 Isuna 139,259 Maio SIC 29.983 2,032 Baenga SIC 5,394 1,739 Luluga SIC 13,004 2,015 Luova SIC 49,300 53,912 Venga 5IC - 23,850 Nea SIC 59,211 2,272 Nermba 27,112 Manoputi 64,818 Lata Area 4 SIC 2,400 Legalau 63,947 Kornuporo 79,551 Papagu 23,535 Koliasi 11,415 Mahu 27,620 Total 474,012 570,988 9